Effects of the Gulf Oil Spill on Employment Estimates

The Current Employment Statistics (CES) survey, also known as the payroll survey, publishes estimates of employment,
hours, and earnings by industry at national, state and metropolitan area levels on a monthly basis. The destruction caused by the
fire and explosion that occurred at the Deepwater Horizon oil rig on April 20, 2010 and the resulting oil spill may have both short
and long-term economic consequences, and data from the CES survey may help policymakers and the public gauge the effects on the labor
market. The CES national estimates for the month of May 2010, published on June 4, were the first to capture any employment impacts, if any, from
the oil spill. May estimates for state and metropolitan areas were first published on June 18.

How the disaster will affect key economic indicators will depend, in part, on the concepts and definitions used by the various
programs at BLS. The definition of employment, for example, differs somewhat in the Bureau's two monthly surveys of the labor market—the
CES and the Current Population Survey (CPS)—as well as in the quarterly census totals released by the Quarterly Census of Employment and Wages (QCEW) program. Those definitional differences may affect each program's
measure of employment in the disaster's wake.

The information below provides Questions and Answers to help data users understand how CES data might be useful to understand ongoing
developments resulting from the oil spill.

BLS and its state partners have not modified the standard procedures for developing CES estimates.

CES CONCEPTS AND DEFINITIONS

1. How are people who are absent from their jobs counted by the payroll survey?

Workers who are paid by their employer for all or any part of the pay period including the 12th of the month
are counted as employed in the payroll survey, even if they were not actually at their jobs. Workers who are temporarily
or permanently absent from their jobs and not being paid are not counted as employed.

2. Are Coast Guard employees or military reservists who were called up to aid in the spill clean-up effort counted
as employed in the payroll survey?

Active duty military personnel are not counted in the payroll survey; it is a count of civilian jobs.
However, civilian employees who work and are paid by the Coast Guard will be included in the employment count.

3. How are workers from other parts of the country who may be on temporary assignment to the disaster area,
such as utility workers, counted by the payroll survey?

These workers are counted as employed at their usual place of work. For example, utility workers from Virginia working temporarily in
Louisiana would be counted in the Virginia employment estimates, but not in the Louisiana estimates.

4. Are volunteers aiding in the oil spill cleanup effort counted as employed by the payroll survey?

The CES program counts workers as employed if they performed 1 hour of paid labor within the reference period. If volunteers do not receive pay,
they are not counted as employed in the payroll employment figures.

5. Are employees in fishing and related industries counted by the payroll survey?

Commercial fishing is classified in the agriculture, forestry, fishing, and hunting sector; workers in this sector are out of scope for
the CES survey. Commercial fishing boats that are engaged in the gathering and processing of seafood into canned seafood products are included
in manufacturing; paid workers on these boats are included in the payroll employment figures (NAICS 311700). Employees of establishments involved
in charter fishing and other excursions by boat are classified in scenic and sightseeing transportation; these employees are counted in the establishment
survey (NAICS 487000).

6. Are employees on oil rigs in the Gulf included in the establishment survey?

Employees on oil rigs located in the Federal waters of the Gulf of Mexico are counted as employed in oil and gas extraction (NAICS 211000) or
in support activities for oil and gas (NAICS 213112). As such, changes in the number of these employees are captured by the CES survey.

7. How are people who are rescuing and cleaning wildlife counted in the establishment survey?

Volunteer or unpaid workers participating in animal rescue and cleanup are not counted as employed by the establishment survey,
while employees of animal shelters (NAICS 712190), wildlife sanctuaries (NAICS 812910), and wildlife preservation organizations (NAICS 813312) are counted.

8. How are people who are hired to clean up the oil counted in the establishment survey?

Employees of establishments that specialize in oil-spill cleanup are classified in remediation services (NAICS 562910).

9. Are people who are hired through the “Vessels of Opportunity” program counted in the establishment survey?

The “Vessels of Opportunity” program allows for local boat operators and their crews to assist with response activities. These boat operators
and their crews may be contracted to assist with cleanup activities; payments for these activities are generally made directly to the boat owner. Self-employed
boat owners and employees on commercial fishing vessels are outside of the scope of the CES survey and therefore not counted as employed. Vessels
that provide services other than commercial fishing and that have paid employees may be counted as employed. See question and answer number 5 above.

CES DATA COLLECTION ISSUES

10. Has BLS been able to collect the usual payroll survey information from businesses that are located
along the Gulf Coast in Florida, Alabama, Mississippi, Louisiana, and Texas?

BLS has been able to collect payroll data from businesses along the Gulf Coast. Survey responses in the counties on the coastline
have been similar to those for the rest of the country.

CES ESTIMATION PROCEDURES

11. Did BLS modify its estimation procedures to account for employment impacts resulting from the oil spill and cleanup?

BLS has not modified estimation procedures. The CES probability sample is selected to minimize error at total State levels of employment.
Since response rates have been normal for the areas along the Gulf Coast, any impacts on employment should be reflected in the sample.

12. Did BLS change its method for estimating employment from business births and deaths in the disaster areas?

BLS and states have not made adjustments to normal birth/death estimation procedures. Under standard CES estimation procedures, sample
units with a reported employment level of zero are excluded from estimate calculation. This is done as a method to offset new business
birth employment which the survey is unable to capture on a real time basis. This technique is used because research has shown that in
most months, employment gain from business births and employment loss from business deaths largely offset each other.

Also the CES program adds a net birth/death employment adjustment, derived from a time series model, to account for the residual
net of birth/death employment not captured by the technique described above.

13. Do the payroll survey estimates reflect employment increases that may result from persons who lost jobs because
of the oil spill finding other jobs with other businesses?

The CES has a large and representative nationwide sample and is expected to capture employment increases in the overall employment estimates
resulting from workers starting jobs with new employers. The survey cannot quantify this effect separately.

14. Were there special procedures for seasonally adjusting the payroll employment series?

CES national estimates utilize a concurrent seasonal adjustment methodology which incorporates estimates up through the most current
reference month. While there have been no methodology changes, BLS has been carefully reviewing the estimates to determine whether any industry series
should be treated as outliers for any particular month. Outlier treatment essentially recognizes a month’s data as atypical and mitigates
any smoothing of the employment change back across earlier months. No industries have been selected as outliers for seasonal adjustment.

State seasonal adjustment factors are updated annually, with January estimate publication, and will not be subject to any changes until
the January 2011 estimates are released.

15. Will BLS attempt to quantify the overall impact of the oil spills on employment for months
following the fire and explosion that occurred at the Deepwater Horizon oil rig on April 20, 2010?

The Bureau's primary goal for the payroll survey is, as always, to provide accurate estimates of employment, hours, and earnings.
It is not possible to directly quantify employment impacts following the explosion and oil spill, because the effects cannot be separated from other
influences on the economy, particularly at the national level.